Global, regional and local: new firm formation and spatial restructuring in China’s apparel industry

Zhu, Shengjun; He, Canfei

Global, regional and local: new firm formation and spatial restructuring in China’s apparel industry

2014

Zhu, Shengjun | He, Canfei

The rise of China as the ‘world factory’ has been attributed to the export-oriented industrialization largely driven by some fundamental transformations unfolding in China’s economic, political and cultural arenas, since the Reform and Opening-Up policies. As production costs and competitive pressures both rise, the flexible business environment that export-led production used to embed in has undergone dramatic restructuring and this has further pushed forward new rounds of spatial restructuring and industrial relocation, especially in China’s highly export-oriented apparel industry. Using a large firm-level dataset on new firm formation, we show the articulation of global, regional and local factors are shaping the new firm formation pattern and industrial relocation in interactional and collective ways. The econometric estimations also indicate the ways in which and the extents to which these factors affect firm location choice are highly determined by firm-specific capability.

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